Grant Anderson, environmental officer at Nottingham Trent University, on the 'eco' roof, planted with sedum. Photograph: David Sillitoe for the Guardian

There's something a bit unnerving about the lifts at Nottingham Trent University, once you're inside at least. Your fingers reach towards where the buttons for the 10 floors should be, only to discover there aren't any. Panic. Then you remember that you already picked the floor you wanted when you called the lift. "It is a bit disconcerting, at first," the environmental officer, Grant Anderson, concedes.

But it's all in a good cause: the "intelligent lift" system minimises the distance the lifts travel by sending one that is close to the floor you're on and is already carrying others to the same destination, cutting down on wasted journeys, and, in turn, wasted energy and the university's carbon dioxide emissions.

A tour of Nottingham Trent reveals countless other thoughtful innovations and moderations: Victorian buildings once modernised into mazes of small windowless rooms have been opened up to make best use of natural light; ranks of white and green-liveried bicycles that can be hired full-time for just £35 a year; windows that open and close automatically depending on the temperature inside.

And the crowning glory, the "green" sedum roof – actually more of a russet colour – on the Newton building, which acts as a natural insulator, helps prevents flash flooding and provides a haven for birds, bees and butterflies. High above it at the top of the listed 1950s Portland stone tower incorporated into the newly constructed modern part of the building, four peregrine falcon chicks await the return of their parents to the nest that has been kept secret for 10 years to protect them from thieves.

It seems no stone has been left unturned in the university's bid to green its operations, so it's no surprise that NTU has just topped the People & Planet Green League of UK higher education institutions for the second time in three years.

Its vice-chancellor, Professor Neil Gorman, puts it down to staff – including, crucially, the senior management team – ensuring environmental issues are on a par with other key tasks, such as deciding which courses to offer and working with business.

"It's not a 'nice to do'," he says, sitting in his office equipped with state-of-the- art video-conferencing equipment (he refuses "to go to Australia for 45 minutes" to deliver a speech). "It's an equal partner."

Yet for all the successes, one critical area remains a major stumbling block for the university, and it is not alone. Despite setting an ambitious target to reduce its carbon emissions by 48% between 2005 and 2020, and 10% by 2012-13, they have actually gone up by 24% so far.

The story is the same across large swaths of the sector, this year's Green League reveals. A sector-wide target calls for a 43% decrease in emissions from 2005 levels by 2020, but at 63% of universities in the tables they've actually gone up. The average increase per university is 7.4%, and total emissions from the institutions giving figures have risen by 3.9%. All this is despite the fact that their capital funding, in England at least, is now linked to the reductions they can achieve against sector targets.

"It's incredibly worrying," says People & Planet's climate campaigns and communications manager, Louise Hazan. "The planning is there, the policy is there, to a certain extent the resourcing is there, but the performance is just lagging behind.

"Over the next couple of years I would expect to see that change quite rapidly. But it's not looking terribly encouraging at the moment – on current trends the sector is nowhere near reaching the emissions cuts required of all public sectors by the Climate Change Act."

Andrew Smith is the Higher Education Funding Council for England's (Hefce) head of estates and sustainable development. "This is a really pressing issue," he says. "We've got a load of plans and strategies, but what we really need now is delivery."

In some areas even the planning was not up to scratch. More than a fifth (22%) of universities who took part did not have a publicly available carbon management plan setting out targets for reducing emissions at the time the research was conducted.

Given that universities can save cash through greater energy efficiency and risk losing funding by not getting their act together, as well as alienating increasingly climate-conscious students (a 2009 study found that more than a third consider the environment to be important in their choice of university), Hazan says it's time for them to get smarter about how they spend their money. "Quite simply, it just makes financial sense for institutions to start investing as soon as possible. There are universities saving massive amounts of money on energy bills from really relatively small investments upfront."

The Green League looks a bit different from your average university ratings table. Newer, teaching-focused institutions tend to be at the top, while research-intensive Russell Group members are hardly to be seen in the higher echelons. None makes it into the top 20, with the London School of Economics the highest Russell Group institution placed at number 22. That earns it a "first", in the table's degree classification style. Only five Russell Group members get 2:1s, 10 receive 2:2s and three – Oxford, Sheffield and Liverpool – only manage thirds. Cardiff, coming in at number 130, is deemed to have failed.

Carbon emissions have increased since 2005 at three quarters of Russell Group universities, and by as much as 51% at UCL. There are four Russell Group members among the 31 institutions lacking a publicly available carbon management plan.

Why aren't these universities measuring up? "For non-Russell Group universities, being green is definitely a selling point and a way to attract students," Hazan says. "That's not so much the case for Russell Group institutions."

Being research intensive, she points out, means they are bound to be using lots of water and energy compared with teaching universities. But she adds: "In terms of policy, I think it could be said, for some institutions, to come down to a certain arrogance that this is not a priority for them."

Wendy Piatt, the Russell Group's director general, disputes that. "Environmental concerns are taken very seriously," she says. "All of our universities treat their environmental obligations, policies and goals as high priorities."

Research in science and engineering, particularly, involves a relatively high level of energy consumption, she says, and important work in the environmental field is being carried out at Russell Group institutions.

"Researchers are working on new low, carbon energy technologies at Imperial College London, for example, the development of greener aircraft at Bristol, and catalysing cleaner fuels at Oxford," she says. "Such initiatives are crucial if the UK is to remain a world-leader in global efforts to deal with climate change."

So where are those institutions that are doing badly, going wrong – and why?

Queen Mary, University of London, previously ranked in 87th place, this year slips to 135th in the league.

Its newly appointed head of energy and environment, Rebecca Maiden, says it struggles with its buildings, but knows it needs to raise its game, especially in regard to turning policy into action. Part of that has been the creation of her post – she's been there for just four months – and another position the university is currently recruiting for.

"In the past 12 months there has been a real acknowldgement that the environment is an area we need to improve on," Maiden says. "It's been about setting up for the next 12 months, which will hopefully see a major improvement."

Cardiff's spokesman says the university takes its environmental responsibilities very seriously, with senior staff committed to "continually driving forward" existing and new policies to improve performance. "The league table does not reflect the tremendous practical efforts made by staff and students to reduce carbon emissions, promote sustainable development, and embed sustainable development in our operations," the spokesman says.

"We acknowledge that we have a significant challenge with regard to carbon management as a consequence of our substantial research agenda. People & Planet continually fail to credit Cardiff University for the number of core staff we have with designated environmental responsibilities, seemingly because they are not purely dedicated to environmental issues."

There are plenty of success stories in this year's results too. Given that almost a third of the UK's greenhouse emissions come from food production, People & Planet is encouraged that 49 universities - 34% of the sector - now have a publicly available sustainable food policy, an increase of 10 percentage points on 2010.

One in 10 institutions is now purchasing significant amounts of renewable energy (compared with 8% last year), and the sector is recycling 45% of its waste on average - including construction waste. That's a significant increase on last year's figure of 37%, says Hazan.

This year, two new areas are also being considered: ethical procurement and curriculum content. Universities have massive purchasing power – more than £8bn is spent each year on goods and services, through lots of different supply chains, and they've got a responsibility to ensure they're not causing human rights abuses through those chains," Hazan says. Although 68% of the sector is now accredited with Fairtrade status, no universities gain full points in the ethical procurement section.

Only 16 institutions scored full points for integrating sustainability into their teaching and research activities, a move necessary not just to promote behaviour change, but also to give graduates an understanding of environmental and social issues that will be crucial in the future, according to People & Planet.

"Students who are now being asked to pay on average £9,000 a year are demanding that their universities prepare them for entry into the fast-expanding low-carbon workforce and marketplace," Hazan says.

A commitment to including sustainabilityin the teaching on every course has been NTU's big triumph this year. University is about building the individual, Gorman believes. Putting the underlying environmental challenge at the heart of all the institution's projects has been the key to getting buy-in from students and employees, he says. "That's how we have embedded it across the culture. I don't think you can achieve this just by saying 'thou shalt'."

And while he still gets the odd email complaining about having to queue at shared printers, the kudos the university gained from its previous Green League win, in 2009, seems to have inspired a cross-campus sense of pride and eagerness to do more, right down to reception officer Michael Wells's obsession with checking the webcam trained on the peregrine falcons.

Coming top was a watershed moment, Anderson says. "Since then it's always been an open door with new ideas."

He and Gordon accept that institutions with historic buildings that are all but impossible to make more carbon efficient face tougher challenges. But with so many other critieria to gain points in, they say that shouldn't be a barrier to achievement.

Hazan agrees. "There are lots of things you can't get around, but there's an awful lot that universities could be doing that they're not yet doing."

The chief executive of Universities UK, Nicola Dandridge, says the targets set by the sector are meant to be challenging. "We recognise that there is more work we need to do," she says. "But it's important to focus also on universities' wider and invaluable contribution to the green agenda in terms of their environment-related research and teaching."

People & Planet says action is going to be required from the government. "There's been no high-level acknowledgement of the importance of this at all. We want to see this is an issue that's being looked at and that they're taking note of quite serious shortcomings," says Hazan.

"For the universities minister, David Willetts, in particular, the recommendation is clear: show more leadership and vision for a sector-wide low-carbon transition plan within the next 10 years and prioritise the resources to help universities achieve it.

"This should be a wake-up call to government and the sector to act faster and deeper in the face of a looming climate crisis and funding cuts."

Five things there are no excuses for

1 Lack of a transition vision

By 2011, every institution should have a publicly available carbon management plan that sets out how it will reduce its emissions. Without clear targets, universities struggle to devote the necessary priority and resources to tackling the challenges of climate change and sustainability. A fifth of all universities have yet to publish their strategies.

2 Failure to engage students

Universities are missing a trick if they're not doing everything possible to engage their students and to influence student behaviour. Given the rise in tuition fees, it's also inexcusable for students not to be involved in shaping universities' future and priorities.

3 Not employing sustainability staff

Without professional staff dedicated to environmental management, it has been consistently demonstrated that green initiatives are unlikely to be systematic, well-co-ordinated or sustainable.

4 Lack of action on carbon reduction

It's unacceptable for institutions to lead the way on climate change research globally while continuing to increase their own emissions. Serious investment in energy-efficiency measures and renewable energy generation is needed now to have any hope of meeting government targets.

5 Not telling the whole story

Universities spend around £8bn a year on procuring goods and services but the majority do not monitor the emissions arising from this. As this can account for more than 50% of an institution's carbon footprint it's essential that they be monitored … and reduced.

Louise Hazan, Climate campaigns manager, People & Planet

• People & Planet is a student campaigning network originally set up in 1969 to raise money for overseas aid. Recently it has campaigned for Fairtrade school uniforms and against sweatshops, and for ethical investment by pension funds. People & Planet is also behind the Transition University initiative, which enables institutions to improve their environmental performance. There are People & Planet groups at 71 universities and colleges.

This is the fifth successive year of the People & Planet Green League and the first time the organisation has teamed up with the Guardian. This year more universities than ever have participated: 142 institutions provided enough information to be entered into the league table.